Carbondioxide was shown to have a regulatory function on cell growth. The immediate effect of CO2 on growth of E. coli was to initiate RNA and protein synthesis. The optical density of the culture paralleled the increase in protein. Cell division, however, was delayed. On removal of CO2, RNA synthesis stopped immediately, and after a short delay, protein synthesis decreased to a low rate, while cell division continued to about one doubling. All early products of CO2 fixation had to be present to replace the CO2 requirement. Malonate incorporation into cellular fatty acids was analyzed to determine if acetyl carboxylase was the controlling reaction.